LONDON: White sugar futures fell to a four-week low on Monday as weak charts and an expected supply glut weighed, while London cocoa edged higher in a muted response to upbeat European fourth-quarter grind data.
New York soft commodities markets were closed for the Martin Luther King Jr. Day holiday and will reopen on Tuesday.
SUGAR
March white sugar was down $3.20, or 0.9 percent, at $371.80 a tonne by 1500 GMT, having fallen to as low as $369.10, the weakest level for the front month since Dec. 19.
Dealers pointed to persistent pressure from bearish chart signals as prices remained below the 40-day and 100-day moving averages.
Focus remained on strong production from Thailand which, coupled with expectations for a sharp rise in EU output, has recently deepened worries about excess world supplies.
Also souring sentiment was the failure of widely expected index-fund rebalancing to boost prices last week, with dealers saying the buying had now wrapped up.
“Scepticism regarding a positive impact on the outright front month sugar price arising from the index fund rebalancing has, once again, proven well-founded,” Tropical Research Services (TRS) said in a market update.
Speculators raised their net long position in white sugar by 4,939 lots to 7,837 lots as of Jan. 9, exchange data showed.
COCOA
March London cocoa rose by 9 pounds ($12), or 0.7 percent, to 1,389 pounds a tonne.
Europe’s fourth-quarter cocoa grind increased by 4.4 percent from the same period last year to 353,286 tonnes, the European Cocoa Association said on Monday.
This fell within dealer expectations for a 2 to 5 percent increase but marked the highest fourth-quarter grinding in ECA data that goes back to 1999.
“It’s the largest fourth quarter grind that we have seen in many years,” one dealer said. “But we have had some of the lowest prices around to favour such an increase in processing.”
However, dealers noted volumes were thin and the New York market’s closure led to a muted response to the data.
Market participants were still awaiting grind figures from North America and Asia, due out on Thursday, for more direction on demand.
Dealers were anticipating North American grindings to show an increase of 1 to 3 percent, while Asian processing was seen at least 5 percent higher.
COFFEE
March robusta coffee was up $2 or 0.1 percent at $1,730 a tonne.
Source: Brecorder.com
